MoneyExpert.com on "Bank of Mum & Dad" research from AXA

14 July 2008

Sean Gardner, director of MoneyExpert.com, said: "The Bank of Mum and Dad is perhaps more exposed to an economic downturn than most."

"While high street banks can hike interest rates and fees to deter customers' requests for cash, parents can do very little to avoid the daily handouts and requests for larger loans from their children."

"Parents are being pulled in all directions - rising fuel and food prices, expensive remortgage costs and the overall cost of borrowing are taking their toll. So it makes sense that eventually the downturn would affect children."

"Children who are being encouraged to save shouldn't be downhearted though. Savings rates are sky high at the moment and there are plenty of good deals available for under 18s. The average interest rate on a regular saver account for children is 5.4 per cent."

"And saving is a good habit to get into so perhaps the turmoil facing the Bank of Mum and Dad isn't all bad news."

"There are also current accounts available to under 18s but some pay as little as 1.5 per cent credit interest while others go as high as 10 per cent. So parents should spend some time helping their kids to understand what account is best for them."